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2021: Reflections on sustainable energy trends and net zero progress

What are the economic, environmental and policy trends of 2021? How are businesses and public bodies shaping a greener, cleaner future?

We look back at the business energy trends and policies of 2021 and assess how far private and public sector organisations have progressed on their sustainable energy journeys.

Race to zero

In August, IPCC climate scientists sounded a 'code red for humanity' – warning that it will be impossible to reach the targeted 1.5°C limit without rapid and deep emissions reductions. 

As employees, customers and investors demanded greater action on sustainability and the world prepared for COP26, organisations faced growing pressure to accelerate decarbonisation – with increasing numbers committing to net zero targets during 2021.

Double whammy hits business finances

Despite the stark realities of the climate crisis and stakeholder pressure, many organisations are also facing tough economic realities.

Economic recovery has been fragile in the aftermath of the pandemic, but organisations have also faced higher inflation, particularly rising energy prices, which are one of the biggest overheads.

Link between profit and planet

The good news is that organisations don't need to choose between profit and planet – the two are firmly linked. Saving energy has always meant saving money, but a progressive approach to energy management can bolster finances in new and exciting ways. 

In June 2021, we released our 'Why Wait to Pursue Net Zero' research report, which showed that by aligning carbon reduction with recovery planning, businesses can gain both financially and environmentally.

49%
Reported using energy management systems and strategies to control costs
79%
Recognised the need to prioritise long-term gains over quick returns and low-risk strategies

We interviewed Uday Senapati of British carmaker Lotus, which is partnering with Centrica Business Solutions to deliver on its net zero ambitions. He said:

We consider sustainability goals as part of the investment now, because it will be much harder to do it later. A better way of calculating the ROI is to ask: what opportunities will you lose if you do not act now?
Uday Senapati Executive Director, Corporate Strategy and Product Management at Lotus

UK policy driving net zero

2021 was a pivotal year in sustainability, including a raft of energy policies. In October the government published its full Net Zero Strategy and Heat and Buildings Strategies – setting out how the the UK will deliver on its legally binding 2050 net zero commitment.

How our customers are meeting the Net Zero challenge

We reflect on some of our 2021 partnership projects and the 3 key methods customers are using to transform their sustainable energy performance, while also improving long term cost management. 

The 3 Cs (Cut, Convert, Complete) approach to Net Zero 

There’s lots of different routes to decarbonisation and many proven, cost-effective technology solutions. But you first need a robust plan, which means understanding your energy consumption and carbon emissions baseline.

The net zero challenge can then be broken down into manageable steps along a sustainable energy pathway. Typically, we take customers through a 3-step journey – referred to as the 3 Cs (Cut, Convert and Complete). 

Step 1:  Cut energy demand through efficiencies

Cutting energy waste and reducing demand through efficiency measures is a critical first step. Many rapid payback technologies are available – leading to fast financial and environmental gains.

This approach worked for Dublin's Marino College, which halved emissions and improved comfort levels via our high impact energy efficiency upgrade. 

Those customers who have already exhausted 'quick-win' energy saving measures are using our energy insight technologies to take efficiency much further. This provides complete visibility of how, when and where they are using energy across their entire estate - right down to an equipment and process level.

How energy insights benefited customers last year:

  • Textile specialist Pincroft reduced weekend energy spend by 94% and weekday energy spend by 29% - gaining a payback on investment in 3 months. 
  • Altex Group cut energy costs by 8% and reduced carbon emissions by 53,000 tonnes.
  • South Port NZ reduced capital expenditure by £430k and increased storage capacity at its 40-hectare commercial water port.
     

Step 2:  Convert onsite infrastructure to support renewable energy and switch to electric vehicles

When our customers are ready to shift their sustainable energy strategy up a gear there are many options, such as:

On-site solar and battery energy storage

Falling costs of solar and battery energy storage technologies are opening up new opportunities for organisations of all types.

  • We're installing nearly 2000 solar panels at Affinity Water's Chertsey production site. In further phases we'll help deliver more solar, wind power and battery storage, as well as enabling a switch to Electric Vehicles (EV).
  • We're supporting the British Army's net zero commitment by installing 4,248 solar panels at the British Army's Defence School of Transport. This is the first of four pilot projects that will result in £1m efficiency savings and reduce carbon emissions by the equivalent of 700 tonnes each year.
  • We've recently launched Centrica Energy Assets – to build a 900MW portfolio of solar and battery storage assets over the next 5 years.
  • In collaboration with our Dutch partner, Albers Alligator, we've developed the world’s first solar photovoltaic (PV) enabled floating water basin cover.

Optimising and monetising on-site power

Customers are optimising their on-site energy supply – from both Solar, Combined Heat and Power (CHP) and battery storage – to avoid peak-time power costs. They're also earning flexibility revenues by exporting spare power capacity to keep the grid balanced.

Over the past year we have supported many customers to access the full range of Demand Side Response (DSR) opportunities in ancillary and wholesale markets, and have leveraged automation and aggregation to access more energy markets.

Electric vehicles

The big EV switch has gathered pace – led by businesses and public bodies. As part of our own net zero 2045 target, we brought forward our commitment to electrify our 12,000-strong fleet of vehicles to 2025 and made the largest commercial battery electric vehicle order in the UK to date.

We're helping to make the EV transition process simple and easy for our customers via our EV Enablement solution, including:

  • Installing 17,000 charging points across our customer sites.
  • Supporting the ambitious electrification plans of ABB UK, which has committed to electrify its UK fleet of over 500 cars by 2025.
  • Installing EV infrastructure to power Manchester's green buses.

Heat decarbonisation

The urgent need to decarbonise heat attracted growing attention. Electric heat pumps are seen as an immediate, scalable solution, together with green gas, plus hydrogen further down the line.

Our customers recognise the potential to reduce heat pump costs and improve carbon performance by using power from on-site solar. At Hereford County Hospital we've installed a 6-mile long ground source heat pump network and 300 solar panels as part of a £4.7 million energy upgrade.

Hydrogen will be a key enabler of the UK’s transition to net zero and we’re part of the Hydrogen Taskforce. In December we acquired a minority stake in break-through hydrogen production technology company HiiROC. We're also exploring the future role that our Rough gas field could play by repurposing it into a hydrogen storage facility. 

Step 3:  Complete your journey using off-site renewable energy supply, where necessary

Some sites are unsuitable for renewable onsite generation and storage, while many are unable to go completely off grid. This means that they must purchase any residual power demand.

We provide zero carbon electricity to all our British Gas business customers in the UK as standard. Last year, this saved organisations 1.4MTCO2e – the equivalent to taking almost one million cars off the road.

  • Our British Gas supply team has helped NHS Property Services (NHSPS) to switch its entire property portfolio to 100% certified renewable energy.
  • We're supplying a REGO-backed (Renewable Energy Guarantees of Origin) supply contract to Lotus. This is the start of a comprehensive sustainability programme to help Lotus meet its net zero pledge.

Growing role for PPAs

Renewable Power Purchase Agreements (PPAs) are playing a growing role in accelerating decarbonisation. However, it is preferable to select certified agreements that support funding of additional new renewable generators. 

'Walking the talk' on sustainability

We're using the proven methods and technologies that are decarbonising our own business to support our customers' environmental ambitions. One of the key goals of our People & Planet Plan is to reach net zero by 2045 and help our customers be net zero by 2050. 

Between 2015 and 2020 we helped customers cut around 9.4 million tonnes of carbon, while our own business now emits 80% less carbon than the previous decade. We recently achieved a CDP ‘A’ rating for leadership on our action and disclosure on climate change.


Learn what steps sustainable business leaders are taking in their journey to net zero.

Sources:
https://researchbriefings.files.parliament.uk/documents/CBP-9212/CBP-9212.pdf
https://www.gov.uk/government/news/uks-path-to-net-zero-set-out-in-landmark-strategy